EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1055903
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Everdure Australia Pty Ltd applied for a TCO in respect of certain radiant convection gas heater cabinet and chassis subassemblies on 23 December 2010.
Instrument
TCO No 1055903 was made on 21 March 2011. It declares that those certain radiant convection gas heater cabinet and chassis subassemblies are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 1055903 is taken to have come into force on 23 December 2010.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 1055903, made under the Customs Act 1901, was enacted in 2011 to address the need for tariff concessions on specific goods imported into Australia. This instrument was introduced to provide relief on customs duties for certain radiant convection gas heater cabinet and chassis subassemblies, ensuring that these goods are subject to a lower duty rate. The instrument was developed by the Chief Executive Officer of Customs, following an application by Everdure Australia Pty Ltd on 23 December 2010. The policy objective of this instrument is to facilitate the importation of these goods by reducing their customs duty from the general rate of 5% to a concessional rate of free, thereby supporting the availability of these products in the Australian market. The instrument was made without any objections following a public notice and consultation process, and it came into effect on the same day as the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1055903 under the Customs Act 1901 applies to specific radiant convection gas heater cabinet and chassis subassemblies. This legislation enables tariff concessions to be granted by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on eligible goods. The act is applicable nationwide, extending to all states and territories within Australia, thereby impacting importers and manufacturers of the specified goods. The concessions are granted if no substitutable goods are produced in Australia, as defined under sections 269D and 269E of the Act. This legislative instrument does not apply to goods specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The instrument was enacted on the day the application was lodged, 23 December 2010, and it does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth. Importers can also apply for a refund of duty on goods imported since the TCO came into effect.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1055903 (TCO No 1055903) under the Customs Act 1901 (section 269P(3)) declare that certain radiant convection gas heater cabinet and chassis subassemblies are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This tariff concession means that the general rate of duty, which is 5%, is reduced to free. The instrument was made on 21 March 2011, but it is taken to have come into force on the date the application was lodged, 23 December 2010. This means that importers of these goods can apply for a refund of duty on imports made since 23 December 2010.
The obligations imposed by the Customs Act 1901 on the parties or entities it governs in the context of TCOs include the requirement for applicants to ensure their applications meet the core criteria (section 269C). The Chief Executive Officer of Customs (CEO) must then assess whether these criteria are met, which involves determining that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269D, 269E and 269F). If the CEO is satisfied that the application meets the criteria, they must make a written order (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received.
The Customs Act 1901 also outlines the consequences for non-compliance with its provisions. If a person contravenes any provision of the Customs Act 1901, they may be liable to criminal penalties, including fines and imprisonment, or civil penalties, depending on the nature and severity of the offence. The maximum penalties for contravening the Customs Act 1901 can vary widely, but for serious offences, they can include fines of up to $220,000 for corporations and up to $44,000 for individuals, as well as imprisonment for up to five years. The specific penalties depend on the nature of the offence and the circumstances surrounding it. In the context of TCOs, failure to comply with the requirements for applying for or administering a concession could result in penalties under the Act.